Suppose the world was on the gold standard. If the U.S. ran persistent trade deficits, all of the following would occur except
A. the U.S. money supply would decline.
B. the U.S. would have a falling average price level.
C. U.S. interest rates would most likely rise.
D. gold would flow into the United States.
D. gold would flow into the United States.
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Friedmania is a country in which the quantity theory of money operates. The country has a constant population, capital stock, and technology so real GDP does not change
In 2014, real GDP was $500 million, the price level, measured by the GDP deflator, was 150 and the velocity of circulation of money was 10. (Because the price level is measured by the GDP deflator, it must be divided by 100 before it is used in the equation of exchange.) In 2015, the quantity of money increased by 20 percent. a) What was the quantity of money in 2014? b) What was the velocity of circulation in 2015? c) What was the price level in 2015?
If a marginal cost pricing rule is imposed on the natural monopoly shown in the figure above, then the deadweight loss will equal
A) $0. B) $4 million. C) $8 million. D) $12 million.
Flexible exchange rates exist when
A) no one knows what the true value of a currency is. B) governments and central banks spend foreign reserves to prop up an exchange rate at a certain level. C) exchange rates are determined by forces of supply and demand. D) speculators bet that a currency will soon be depreciated.
Stephen Moreno reported to the government interviewer that he worked 40 hours last week as a stocker at a Target department store. He is:
a. a member of the civilian labor force who is employed. b. a member of the civilian labor force who is unemployed. c. a member of the civilian labor force who is underemployed. d. a discouraged worker who is not a member of the labor force. e. not a member of the labor force.